EU’s Top Financial Regulators Warn Quantum Computing Could Undermine the Cryptography Behind Blockchains

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• The European Supervisory Authorities (ESMA, EBA, and EIOPA) warned that quantum computing could undermine cryptography systems that secure communications, transactions, databases, and blockchains
• The warning appeared inside the ESAs’ Autumn 2026 joint risk report, which also flagged the EU financial sector’s heavy reliance on non-EU technology providers and growing AI-enabled cyber threats
• The ESAs said quantum-related risks could materialize faster than commercially viable quantum applications themselves, urging supervisors and firms to strengthen preparedness now

The European Supervisory Authorities, comprising the European Securities and Markets Authority (ESMA), the European Banking Authority, and the European Insurance and Occupational Pensions Authority, jointly warned that quantum computing poses a growing threat to the cryptographic systems underpinning much of modern finance, including blockchain networks, according to their Autumn 2026 risk report. The report states that quantum computing could “undermine cryptography systems widely used to secure communications, transactions, databases, and blockchains,” a direct reference to the mathematical foundations that keep blockchain transactions and wallets secure today.

Critically, the ESAs cautioned that the risk timeline does not necessarily track the pace of quantum computing’s own commercial development. The report notes that cryptographic risks may materialize faster than genuinely useful, commercially viable quantum applications emerge, meaning financial institutions and blockchain networks could face exposure well before quantum computers are powerful enough to be broadly useful for other purposes, simply because breaking existing cryptography requires less computational maturity than many other quantum use cases.

The quantum warning sat alongside two other major findings in the same report. The ESAs flagged that the EU financial sector depends heavily on non-EU providers and infrastructure, particularly for ICT services sourced from outside the European Economic Area, creating vulnerability to geopolitical shocks that could disrupt access to critical technology. Separately, the report warned that AI-enabled cyberattacks are becoming more powerful and harder to contain, stating that “advanced AI systems could make cyberattacks more powerful and harder to contain,” letting malicious actors exploit vulnerabilities more rapidly than before.

The report also examined the EU’s fast-growing private credit sector, which remains small relative to the broader financial system but is expanding quickly with limited transparency, infrequent loan valuations, and unclear leverage levels across the lending chain. The ESAs said liquidity mismatches inside private credit funds could spill over into the banking sector if conditions tightened suddenly.

Despite the warnings, the ESAs characterized the EU financial system overall as resilient, citing strong bank capital ratios, stable investment fund performance, and resilient insurance sector fundamentals. The report’s core message for supervisors and market participants was preparation rather than alarm: it urged firms to begin strengthening defenses against quantum, cyber, and private-credit risks before those risks fully materialize, rather than waiting for a clearer timeline on when quantum computing might become a practical threat to blockchain cryptography.